Rockstar paid $4.5 billion for Nortel patents and has launched a major attack.

Canada-based telecom Nortel went bankrupt in 2009 and sold its biggest asset—a portfolio of more than 6,000 patents covering 4G wireless innovations and a range of technologies—at an auction in 2011.

Google bid for the patents, but it didn't get them. Instead, the patents went to a group of competitors—Microsoft, Apple, RIM, Ericsson, and Sony—operating under the name "Rockstar Bidco." The companies together bid the shocking sum of $4.5 billion.

Patent insiders knew that the Nortel portfolio was the patent equivalent of a nuclear stockpile: dangerous in the wrong hands, and a bit scary even if held by a "responsible" party.

This afternoon, that stockpile was finally used for what pretty much everyone suspected it would be used for—launching an all-out patent attack on Google and Android. The smartphone patent wars have been underway for a few years now, and the eight lawsuits filed in federal court today by Rockstar Consortium mean that the conflict just hit DEFCON 1.

Google probably knew this was coming. When it lost out in the Nortel auction, the company's top lawyer, David Drummond, complained that the Microsoft-Apple patent alliance was part of a "hostile, organized campaign against Android." Google's failure to get patents in the Nortel auction was seen as one of the driving factors in its $12.5 billion purchase of Motorola in 2011.

Rockstar, meanwhile, was pretty unapologetic about embracing the "patent troll" business model. Most trolls, of course, aren't holding thousands of patents from gigantic technology companies. When Rockstar was profiled by Wired last year, about 25 of its 32 employees were former Nortel employees.

The suits filed today are against Google and seven companies that make Android smartphones: Asustek, HTC, Huawei, LG Electronics, Pantech, Samsung, and ZTE. The case was filed in the Eastern District of Texas, long considered a district friendly to patent plaintiffs.

The lawsuits

The complaint against Google involves six patents, all from the same patent "family." They're all titled "associative search engine" and list Richard Skillen and Prescott Livermore as inventors. The patents describe "an advertisement machine which provides advertisements to a user searching for desired information within a data network."

The smartphone patent wars have been underway for a few years now, and the conflict just hit DEFCON 1.

The oldest patent in the case is US Patent No. 6,098,065, with a filing date of 1997, one year before Google was founded. The newest patent in the suit was filed in 2007 and granted in 2011.

The complaint tries to use the fact that Google bid for the patents as an extra point against the search giant. "Google subsequently increased its bid multiple times, ultimately bidding as high as $4.4 billion," wrote Rockstar's lawyers. "That price was insufficient to win the auction, as a group led by the current shareholders of Rockstar purchased the portfolio for $4.5 billion. Despite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe the patents-in-suit."

The suits against the six manufacturing companies each assert the same patents—either six or seven of them, depending on the target. The patents cover a variety of innovations and have different inventors. One patent filed in 1997 for a "navigation tool for graphical user interface" describes a way of navigating through electronic documents. Another describes an "Internet protocol filter," and a third patent describes an "integrated message center."

The manufacturer lawsuits name the targets' whole array of smartphones and tablets. The lawsuit against Huawei, for instance, claims the infringing products include "the Huawei M865 MUVE, Huawei Ascend II, and Huawei Premia 4G M931, and Huawei’s family of tablets, including but not limited to the Huawei MediaPad and Huawei IDEOS S7 Slim."

Rockstar has employed two different law firms to file the suits; both firms have patent experience and experience litigating in the Eastern District of Texas. The Google search suit is being handled by Susman Godfrey, which has taken on other sue-the-world patent cases, like Paul Allen's lawsuits against Facebook, Google, and others.

The manufacturer suits, meanwhile, are being handled by McKool Smith, a formidable Texas law firm that has probably wrung more massive verdicts out of tech companies than any other firm. It scored $368 million from Apple for VirnetX, $290 million from Microsoft over i4i's XML patent, and most recently notched a $173 million verdict against Qualcomm.

The ultimate “patent privateer”

When Wired visited Rockstar's Ontario headquarters, it found 10 reverse-engineering experts, working daily to take apart products and find patent infringement. With just a few dozen employees, Rockstar is hoping to convince more than 100 technology companies to pay it patent licensing fees for a huge array of products. "Pretty much anyone out there is infringing," said Rockstar's CEO, John Veschi.

The Rockstar Consortium may be the ultimate example of patent "privateering"—when big companies hand off their patents to small shell companies to do the dirty work of suing their competitors. Essentially, it's patent trolling gone corporate.

The "privateering" phenomenon has long irked Google. In February, when Google filed a patent lawsuit against British Telecom, it said one of the reasons for the suit was that BT had not only sued Google directly, but it had also gone around "arming patent trolls."

Part of Rockstar's strategy is avoiding a patent countersuit by not having any operating businesses. Essentially, the company wants to enjoy the same advantage patent trolls have, even though it's owned by direct Google competitors like Apple and Microsoft.

"The principals have plausible deniability," said Thomas Ewing, an IP attorney who spoke to Wired about Rockstar. "They can say with a straight face: ‘They’re an independent company. We don’t control them.’ And there’s some truth to that."

And Rockstar's CEO was quite straightforward about his belief that whatever promises Microsoft and Apple might have made about how they'll use their patents, those promises don't apply to Rockstar. “We are separate,” he says. “That does not apply to us.”

Rockstar may want to keep the patent conflict as a kind of "proxy war" between Google and its competitors. But Google has plenty of patents, and this new attack seems assured to bring a counterattack.

The smartphone market is more valuable than ever, and the $4.5 billion Rockstar purchase shows that Google's competitors will spare no expense to put a damper on Android, and they hope to make money while they do it. Patents have become the arena in which tech companies have chosen to do battle. Six years after the iPhone and five years after the launch of Android, the stakes keep getting raised.

555 Reader Comments

Look, I get it, you love Android. I actually have also owned an Android phone - talk about causing myself to suffer. The crashes on ICS got to be too much after awhile and I went back to WP this year after owning an original Focus back in 2011I'll try to say this really slowly so you can understand it. Let's just take the first example. Google redirects WP users to a terrible version of GMail. They do not redirect iPhone users to that interface. If you want to say that that's Microsoft's fault, you're the one who has to live with having that kind of stupidity out in public.

I don't love Android, I just prefer it over everything else available. I don't like it when companies tell me what I can do with a product after I've purchased it.

As for the Gmail issue, it sounds like a problem with the browser on the Windows phone, since iPhone users don't get redirected.

It wasn't an industry standard in 1997 when the patent was filed. Google's Ad-Sense came much later. Heck, Ad-Sense could have come about by someone trawling through the patents to see if there was any way to monetise their search engine.

I'm constantly amazed by the 'but its obvious' remarks in patent cases. Good things often seem obvious after the event. The question is why someone didn't think of it earlier which is because it wasn't obvious at the time.

The question is not if it's obvious, the question is if it's an invention. All these patents sound like someone just had a good idea to monetize search. (Which is great, they should have built a business on it) But no more than that.

In order to file for a patent they broke their ideas down in some basic and - more importantly - once you have the idea blatantly obvious steps. Patents have more than just the non obvious requirement, it also needs to be inventive and the patent needs to cover an implementation, not the general idea.

Although many software patents may satisfy the non-obvious requirement at the time they are filed, I have yet to see one that is inventive or actually covers an actual implementation instead of just describing a general idea in steps.

I guess when you can't compete straight on in the marketplace with inferior products you have to release the lawyer dogs to sic 'em.

Skummy and douchebaggy for sure.

So, Google stealing IP is fine. Whether it's patents, videos and music, or books it's all fine. Since they fill your freebie trough for you. Grow up and make something of value. Your life will be far better than bleating for handouts from Google.

What exactly did Google steal? And what about Microsoft and APple who have both been found guilty of actually stealing from others?

Look, I get it, you love Android. I actually have also owned an Android phone - talk about causing myself to suffer. The crashes on ICS got to be too much after awhile and I went back to WP this year after owning an original Focus back in 2011I'll try to say this really slowly so you can understand it. Let's just take the first example. Google redirects WP users to a terrible version of GMail. They do not redirect iPhone users to that interface. If you want to say that that's Microsoft's fault, you're the one who has to live with having that kind of stupidity out in public.

I don't love Android, I just prefer it over everything else available. I don't like it when companies tell me what I can do with a product after I've purchased it.

As for the Gmail issue, it sounds like a problem with the browser on the Windows phone, since iPhone users don't get redirected.

Yeah, probably the same kind of problem with the browser that caused WP to get redirected from GMaps to Google.com. Until Google gave in and fixed it.

I'm sorry, many those defending Google are wrong. Google does its own wrong by preventing legitimate use of its APIs even from its Android partners only because they want an exclusive. Or, preventing 3rd party developers from using legitimately licensed APIs from being used on the Windows/Apple Phone Platform.

This idea that Google does no wrong and would not have used these patents against Apple or Microsoft is just plain BS!

Its business as we know it today. You want to fix this, fix the patent system

So are you claiming that iPhone users do see the featurephone interface, or that WP users don't? Either way, you need a citation.

I think the real question is why were they being redirected? Was it because Google was simply redirecting anyone using that client because lulz, or was it because something with that client prevented the pages from functioning properly, and so you were being directed away from a page that would not display right/at all?

This claim is just a list of completely obvious steps of how to show related ads with a search results. Anyone even without any knowledge of programming but just a basic knowledge of how the web works would have come up with this if you had asked them: "I want to show ads to a user that are relevant to the search terms."

The whole thing is pages long and can be summarised like this:

When you receive a search, do the normal search. also search in a collection of ads for the same keywords augmented with info from the users profile and display the results (of both searches) on one page. Everything else is just repeating this or window dressing to make it appear more substantial.

Tell me how that is patentable? None of the elements described in the patents are new, the only thing new in the claim is the part in italics. In what reality is that inventive and worthy of a patent?

This claim is just a list of completely obvious steps of how to show related ads with a search results. Anyone even without any knowledge of programming but just a basic knowledge of how the web works would have come up with this if you had asked them: "I want to show ads to a user that are relevant to the search terms."

The whole thing is pages long and can be summarised like this:

When you receive a search, do the normal search. also search in a collection of ads for the same keywords augmented with info from the users profile and display the results (of both searches) on one page. Everything else is just repeating this or window dressing to make it appear more substantial.

Tell me how that is patentable? None of the elements described in the patents are new, the only thing new in the claim is the part in italics. In what reality is that inventive and worthy of a patent?

Well, can I sue someone based on monetizing that feature? Regardless of whether it makes sense, mind you. Just, can I sue? America's amazing legal clusterhug.

I'm sorry, many those defending Google are wrong. Google does its own wrong by preventing legitimate use of its APIs even from its Android partners only because they want an exclusive. Or, preventing 3rd party developers from using legitimately licensed APIs from being used on the Windows/Apple Phone Platform.

This idea that Google does no wrong and would not have used these patents against Apple or Microsoft is just plain BS!

Its business as we know it today. You want to fix this, fix the patent system

I assume there is some plan to sue Apple and Microsoft for patent violation as well? No?

That's because they're not really independent.

I assume that these patents were offered to Google to license at reasonable terms and Google refused.

No?

This is why the 'standards dependent' patent suits from Motorola should have been allowed.

The final solution is to disallow all software patents, and make software require copywrite instead.

Apple and MS bought these patents and sold them to Rockstar. You can bet on it that the sale included a royalty free perpetual license to the patent. So the backers would not be sued since they have a license.

True they asked Google to join, but there is a problem here. Apple provides the software for their own phones, Windows phone is provided by Microsoft and thus both are covered by the license. If Google had joined, their nexus phones would have been covered, but as phone makers usually bake their own android versions from the source, none of those handset makers would be covered for their own flavor of android. Google joining them would have been meaningless unless Google had started providing all software, which would have killed the android market.

So the MS and Apple offer was nothing more than posturing and it seems a lot of people are falling for it. Google are no saints and have not completely lived up to their don't be evil motto. But they did not become stupid over night. They saw the offer for what it was and ignored it. This has the smell of cartel all over it and will drive up phone prices worldwide regardless of the outcome. (legal cost must be recouped one way or the other). Which begs the question: Will the EU research this as seriously and thoroughly as they've recently looked into Google?

Well, can I sue someone based on monetizing that feature? Regardless of whether it makes sense, mind you. Just, can I sue? America's amazing legal clusterhug.

You can sue anyone anywhere in the US for anything. That has been proven over and over. Recently we have seen that if you go too far it will have consequences (Hi mr Steele and mr Hansemeier).

The problem is that after a completely moronic supreme court decision allowing software patents in the first place there is now the situation that patentability has become fuzzy and these things get upheld because they were upheld before. We made a stupid mistake once and now we build on that mistake to make it even more stupid. Courts have a hard time admitting they were wrong and now with years of denial correcting it has become hard.

I would like to see the supreme court have a look at the patent above though. I would love to see them ask the ionventor what the actual invention is and whats so ibventive about it.

Apple and MS bought these patents and sold them to Rockstar. You can bet on it that the sale included a royalty free perpetual license to the patent. So the backers would not be sued since they have a license.

Yeah, I'm sure there was some kind of deal. The Federal Trade Commission, Commerce Dept or whatever relevant three letter agency should look into this arrangements to make there is no "self dealing" or other shenanigans going on.

One can argue that the patents are invalid, or that Android doesn't infringe, or both.

The first will be determined by challenges and reviews at court and with the USPTO. The second will be determined by a court.

But I don't get people who are arguing that even if the patents are valid and that Android infringes, that the patent holders have no right to do what they want with the patents. These are not SEPs.

It is also funny that because Google lost the bid for the patents that they wanted to use against their competitors (don't litigate, innovate!), suddenly it's not ok to use these patents. Hypocrisy is everywhere, but in this case, wow!

And talk about scummy. Google and Samsung have been using SEPs to attack competitors. This is so bad that they got in trouble in the EU, and in the US the USTR vetoed a court decision to prevent such behavior.

The others are making the case that Android et al are infringing on non-SEP patents. Oracle may yet win its case. There are 22 agreements in place where Android manufacturers are paying royalties that are due to infringement.

In the last couple of years my opinion of Samsung and Google have changed drastically. They both use the same strategy of stealing others' work and flooding the zone with cheap competitors. Then they cry foul when others use their only legal recourse. Because of this I've been weaning myself from Google. If Mailbox allows integration with another service I will finally ditch the last google service I still use.

Then there is the part where Google was asked to join the Rockstar group in their bid for the Nortel patents and refused to do so, preferring to bid for them on their own.

I addressed that on this same page of replies. That was just posturing just read it back. Don't fall for it, you are blindly repeating what they (MS, Apple et al) want people to remember.

Would you pay for something, knowing you get no benefit from it, not even indirect as protection from lawsuits?

Or the fact that it would cause Google to lose their competitive edge: Google holds 81% of the smartphone market share. This is a direct result of Android's prevalence across such a wide variety of devices. If Google got in on the patent deal with Rockstar, et al., they would lose that diversity that has gained them the market share.

Or the fact that it would cause Google to lose their competitive edge: Google holds 81% of the smartphone market share. This is a direct result of Android's prevalence across such a wide variety of devices. If Google got in on the patent deal with Rockstar, et al., they would lose that diversity that has gained them the market share.

Then there is the part where Google was asked to join the Rockstar group in their bid for the Nortel patents and refused to do so, preferring to bid for them on their own.

I addressed that on this same page of replies. That was just posturing just read it back. Don't fall for it, you are blindly repeating what they (MS, Apple et al) want people to remember.

Would you pay for something, knowing you get no benefit from it, not even indirect as protection from lawsuits?

The "benefit" they wanted to get by not going with the others was the ability to sue them into oblivion. The others offer was basically to neutralize the patents for those that participated. Google didn't want neutral patents. They wanted them as a club.

They've been evil ever since promising not to compete with the iPhone prototypes that they were privy to seeing during it's early development, and then announcing Android a few months after the iPhone was released.

ATTACK OF THE ZOMBIE COMPANIES - Rockstar is the new SCO, no doubt about it. Apple's latest product refresh and the latest OS X update already had me thinking Apple is running on fumes and is pretty much a goner, but this Rockstar thing - WOW! If you're Apple and you find your company name in the same line with Microsoft, Blackberry, Ericsson and Sony. Good thing this hit the news on halloween because these are all companies with no new ideas that passed death into undead status. I can't believe no one else sitting in the room as Rockstar was being formalized didn't think, "Heavens sake - call the office, are they sure - Blackberry & Ericsson are here and they haven't been embalmed yet...".

Google kind of did this to itself unless they asked other companies to go in with them and no one bit. I doubt they asked however. Their goal of wanting to be the be all to end all, to the point that they often put other companies out of business in their quest to provide everything like say even fonts, kind of makes it hard for me to feel bad for them. Samsung has deep pockets they needed a consortium too but they probably thought their Motorola patents were going to be more helpful. It is odd to me how even with the Motorola patents, Google seems to win less than it looses and even Samsung doesn't do as well as it should either. Obama never should have weighed on this either, he's struggling as President, so really stay out of technology.

Either you legislate them out of the market like Comcast is attempting to do with GigaBit in Seattle as legislatures across the country fight "municipal fiber" or you try to SCO them as we have hear but apparently you do not EVER offer consumers better pricing and never just a better product. We love to brag about free market principles here in the US, but when you look at say broadband pricing around the world the only thing that's clear is consumers are paying dearly for antiquated technology and infrastructure. There's nothing free about it.

They've been evil ever since promising not to compete with the iPhone prototypes that they were privy to seeing during it's early development, and then announcing Android a few months after the iPhone was released.

I would like a citation for this, because there is plenty of documentation that Schmidt was never privy to insider details from Apple. The SEC tends to REALLY frown on that.

Are jury qualified on those [patent] trials? In standard court proceeding either of suing parties can dismiss jury they don't like (e.g. suspect him prejudiced) . Then why not to introduce minimum qualification for jurors on these kind of proceedings (BS CS)? For one thing, I would be more enjoying serving my duty at this kind of trial, rather than being randomly pushed to some area beyond my expertise and interest.

Then there is the part where Google was asked to join the Rockstar group in their bid for the Nortel patents and refused to do so, preferring to bid for them on their own.

I addressed that on this same page of replies. That was just posturing just read it back. Don't fall for it, you are blindly repeating what they (MS, Apple et al) want people to remember.

Would you pay for something, knowing you get no benefit from it, not even indirect as protection from lawsuits?

The "benefit" they wanted to get by not going with the others was the ability to sue them into oblivion. The others offer was basically to neutralize the patents for those that participated. Google didn't want neutral patents. They wanted them as a club.

Exactly.

A huge coalition formed to share the costs of purchasing the patents to take them out of play, and Google refused to take part as a member of that coalition.

Instead, they tried to get them all for themselves and use them as a weapon just as they used standards essential patents they acquired from Motorola as a weapon.

Now they want to pretend they are the victim here?

Sorry, but if it's acceptable for Google to attack others with standards essential patents, it's perfectly acceptable to go after Google with patents that are not under FRAND restrictions.

One can argue that the patents are invalid, or that Android doesn't infringe, or both.

The first will be determined by challenges and reviews at court and with the USPTO. The second will be determined by a court.

But I don't get people who are arguing that even if the patents are valid and that Android infringes, that the patent holders have no right to do what they want with the patents. These are not SEPs.

It is also funny that because Google lost the bid for the patents that they wanted to use against their competitors (don't litigate, innovate!), suddenly it's not ok to use these patents. Hypocrisy is everywhere, but in this case, wow!

And talk about scummy. Google and Samsung have been using SEPs to attack competitors. This is so bad that they got in trouble in the EU, and in the US the USTR vetoed a court decision to prevent such behavior.

The others are making the case that Android et al are infringing on non-SEP patents. Oracle may yet win its case. There are 22 agreements in place where Android manufacturers are paying royalties that are due to infringement.

In the last couple of years my opinion of Samsung and Google have changed drastically. They both use the same strategy of stealing others' work and flooding the zone with cheap competitors. Then they cry foul when others use their only legal recourse. Because of this I've been weaning myself from Google. If Mailbox allows integration with another service I will finally ditch the last google service I still use.

Hipocrisy is a two edged sword. When someone uses your FRAND patent for years without paying, what exactly can you do but sue for your money? Also, Google/Motorola used the SEP patent as a defensive patent against Microsoft.

Buying these patents as part of a group makes no sense for Google. It would have cost them a lot of money, and they wouldn't stop Microsoft and Apple from using other patents against Google. Also, considering the consortium, Google has a good argument that this is an antitrust violation.

Or the fact that it would cause Google to lose their competitive edge: Google holds 81% of the smartphone market share. This is a direct result of Android's prevalence across such a wide variety of devices. If Google got in on the patent deal with Rockstar, et al., they would lose that diversity that has gained them the market share.

How they would lose that diversity forming part of the patent deal?

If the Android OS was identical across all devices, what would be the point? Google's business would dry up like the Salton Sea. Google won the market share they did by allowing such diversity. When I could afford a smart phone, my options were a ~$100 Huawei Android or the ~$200 iPhone 4.

EDIT: I actually think my price was something like $79. Yes, it was a shitty little thing, but it fine for a year, until I was able to afford a less shitty smart phone (and the associated fees from the less shitty carrier).

Then there is the part where Google was asked to join the Rockstar group in their bid for the Nortel patents and refused to do so, preferring to bid for them on their own.

I addressed that on this same page of replies. That was just posturing just read it back. Don't fall for it, you are blindly repeating what they (MS, Apple et al) want people to remember.

Would you pay for something, knowing you get no benefit from it, not even indirect as protection from lawsuits?

The "benefit" they wanted to get by not going with the others was the ability to sue them into oblivion. The others offer was basically to neutralize the patents for those that participated. Google didn't want neutral patents. They wanted them as a club.

Exactly.

A huge coalition formed to share the costs of purchasing the patents to take them out of play, and Google refused to take part as a member of that coalition.

Instead, they tried to get them all for themselves and use them as a weapon just as they used standards essential patents they acquired from Motorola as a weapon.

Now they want to pretend they are the victim here?

Sorry, but if it's acceptable for Google to attack others with standards essential patents, it's perfectly acceptable to go after Google with patents that are not under FRAND restrictions.

And you just stepped into the realm of complete bullshit. Google has not used its patents offensively if any of those cases.